Brands Need Facelift to Fight the War of Talent in China
By Fanny Chan, Publisher, A-Performers.com
About the author
20 Sep 2005
Powerful forces are shaping today's workforce and
hampering companies' ability to attract and retain the talent they
need to meet business priorities. Globalization, virtual work teams
and the cross-penetration of markets by aggressive competitors demand
a shorter and more flexible corporate planning cycle. Other important
issues, such as the enforcement of corporate governance, the rise
of the Asian economy and soaring oil prices, have changed the corporate
landscape dramatically in recent times.
Consultancy McKinsey in 1998 coined the expression
"War for Talent" (1,2), predicting
the challenge of an "executive gap" an age of escalating
competition to win superior talent , one triggered by global demographic,
social and economic changes as populations in the developed world
age and workforces shrink. . That age is now here. The public and
private sectors now face a growing scarcity of executive talent.
The Human Capital Challenge in China
In the China context, these global trends in human capital management
are playing out in particularly challenging ways. Although China
has rapidly become a global economic force, at the same time a lack
of skills has led to increasing labor shortages in many areas. As
the economy grows and moves into higher value-added work, the challenge
of attracting and retaining staff is rising with the skill level,
as demand outstrips supply, especially in the mid-level and top-level
The establishment of many more foreign invested
enterprises, 44,000 in 2004 alone(5), in recent
years has steeply sharpened competition just as a much greater threat
begins to come into focus ¡X the growing number of Chinese private
sector companies able to offer competitive salaries and career paths
for young, talented Chinese.
As a consequence of this competition, the salaries
of technical and professional staff at multinationals in China have
increased 25 percent in the last three years and job-hopping has
become endemic. Turnover among skilled managers is in the 30 to
40 percent range annually, versus a global average of 5 to 10 percent.
Revisiting the Talent Management Strategy
The talent game is changing and companies must now make talent management
a top priority, create and perpetually refine their employee value
proposition, source and, above all, develop talent systematically.
Peter Drucker wrote about "attracting and
holding knowledge workers in the next society".(3)
Said Drucker: "Knowledge workers know when they can leave.
They have both the mobility and confidence. This means they have
to be treated and managed as volunteers...The first thing such people
want to know is what the company is trying to do and where it is
going. Next, they are interested in personal achievement and personal
responsibility - which means they have to be put into the right
job. Knowledge workers expect continuous learning and continuous
training. Above all, they want respect¡Kfor the area of their knowledge".
Deloitte recently published a study on talent management
strategy (4) and surveyed
on top employees' expectation from their employers. The responses
echo Drucker's earlier insight on managing talents to provide them
with challenge and growth. The top three responses were: 1) interesting
and challenging work, 2) open and two-way communication, 3) opportunity
for growth and development. Monetary rewards came eighth.
Business leaders should revisit their talent management
strategy regarding their top talents in order to identify talent
and develop critical skills within their companies -- skills that
will allow both employees and companies to reach new levels of performance.
Companies need to engage existing talent and stretch its horizons
and possibilities, by deploying talent in new and exciting ways
in "stretch" assignments, while allowing employees to
learn. They will also need to find multiple careers within the same
organization for employees by connecting them to their peers and
other professionals whom they can learn from and explore other career
Attracting and Retaining the A-Performers
"A"-level performers are described(1)
as "much more productive than their mediocre peers and provide
a 50% to 100% performance premium to their employers, adding significantly
to sales booked, customer satisfaction, quality of output, internal
morale, contributing to the overall corporate competitive advantages
The A-performers, amongst the best in their professions,
are successful, almost always employed someplace else and are highly
valued by their current employers and sought after by other employers.
A-performers never look for a job; they look for
a career advancement opportunity. They seek out positions that will
enable them to probe and extend the limits of their expertise in
their field and employers that will provide an environment for accomplishing
important and meaningful work.
A-performers are motivated in a very different
way than their less capable co-workers when it comes to choosing
employers to develop their career. They expect much more than an
opening's challenge, its compensation, or the quality of life it
supports. Instead, they have to come to believe that the value proposition
of the recruiting organization is better than the value they receiving
from their current employer, before they make any career decisions.
The A-Performers carefully evaluates a prospective
employer's culture, belief system, mission, leadership priorities,
employment practices and track record. Those factors determine the
nature of the work experience an employer provides to the people
it hires. And, that experience is the essence of an organization's
corporate brand image.
Corporate brand management has been one of the
top items in corporate agendas to be given a substantial facelift
in recent years for a number of reasons; to rebuild and strengthen
stakeholders' confidence as well as to fight the War of Talent.
Corporate brands have now also become powerful tools used in talent
management to win A-Performers. To compete in the new talent game,
corporations should offer both a challenging job and a compelling
corporate brand image; a brand image that describes its true company
value proposition, culture and talent management experience from
selecting, developing, and retaining world-class executive talent,
a corporate culture image that cannot-be-matched by other competitors.
Living in the age of "War for Talent",
many big multinational companies are fighting the war to attract
and retain "A"-level performers, a person who is among
the best talent in their profession. The companies doing the best
job of managing their talent deliver far better results for shareholders.
Thus the war for senior executive talent will remain a defining
characteristic of the competitive landscape for decades to come.
In the China context, the particular skill shortages mentioned most
often are creativity, an aptitude for risk-taking and, above all,
an ability to manage in everything, from human resources and accounting
to sales, distribution, branding and project-management. The war
to win Chinese talents looks to be a tough one to fight and corporate
recruiters must be ready to sharpen their unique weapon, the corporate
brand, to face the challenge.
- The war for talent - Elizabeth
G. Chambers, Mark Foulon, Helen Handfield-Jones, Steven
M. Hankin, and Edward G. Michaels III. The McKinsey Quarterly,
1998 Number 3.
- The war for talent, part two
- Elizabeth L. Axelrod, Helen Handfield-Jones, and Timothy
A. Welsh. The McKinsey Quarterly, 2001 Number 2.
- Managing the Next Society
- Peter F Drucker, St. Martin's Press 2002
- It's 2008: Do You Know Where
Your Talent Is? Why Acquisition and Retention Strategies
Don't Work. A Deloitte Research Study, February 2005
- Human Resource Challenges and
the Development of China's Financial Sector, Deloitte
Touche Tohmatsu,: June 21, 2005
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